What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-05 · 170 added, 104 removed, 182 unchanged (60% of the section changed)

13 unchanged sentences

our confidence in the Company’s long-term growth strategy;

our areas of focus and management initiatives;

our areas of focus and management initiatives, including our business and digital transformation initiatives, and the success thereof;

our plans and ability to enhance our facilities, fleet, and technology hardware;

our ability to manage increases in fuel and other energy prices;

the demand outlook for construction materials and expectations regarding new home construction, repair and remodel activity and continued investment in existing and new homes;

3 unchanged sentences

our ability to generate profits and cash from sales of specialty products;

our ability to successfully integrate the operations of Disdero;

our ability to successfully integrate the operations of Disdero, including our ability to strengthen and expand our premium specialty product offerings;

or ability to effectively manage inventory;

8 unchanged sentences

and whether or not the Company will continue any share repurchases.

These risks and uncertainties also include those discussed under the heading “Risk Factors” in Part II, Item 1A of this Form 10-Q, under the heading “Risk Factors” in Part I, Item 1A of our 2025 Form 10-K, and those risks and uncertainties discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

These risks and uncertainties also include those discussed under the heading “ Risk Factors ” in Part I, Item 1A of our 2025 Form 10-K, as supplemented by the risk factors disclosed in Part II, Item1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the Quarterly Period ended April 4, 2026, and those risks and uncertainties discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

We operate in a changing environment in which new risks can emerge from time to time.

4 unchanged sentences

In addition to historical information, the following discussion and other parts of this Form 10-Q contain forward-looking information that involves risks and uncertainties.

Our actual results could differ materially from those anticipated by this forward-looking information due to the factors discussed under Part II, Item 1A, Risk Factors, in this Form 10-Q and under Part I, Item 1A, Risk Factors, in our 2025 Form 10-K.

Our actual results could differ materially from those anticipated by this forward-looking information due to the factors discussed under Part I, Item 1A, Risk Factors, in our 2025 Form 10-K, as supplemented by the factors discussed in Part II, Item 1A, Risk Factors, in our Form 10-Q for the Quarterly Period ended April 4, 2026.

We remain committed to driving a culture of profitable growth within new and existing product lines and geographies, while positioning the Company for long-term value creation.

2 unchanged sentences

We continue to pursue a revenue mix weighted towards higher-margin, specialty product categories such as engineered wood products, siding, millwork, outdoor living products, specialty lumber and panels, and industrial products.

Additionally, we are expanding our value-added service offerings designed to simplify complex customer sourcing requirements.

Additionally, we are expanding our value-added service

offerings designed to simplify complex customer sourcing requirements.

Our acquisition of Disdero in the fourth quarter of fiscal 2025 enhanced our revenue mix by adding a significant number of new lines of premium specialty building materials, including decking, trim, flooring, paneling, posts, timbers, siding, and stepping, to our product offerings.

9 unchanged sentences

We further seek to maintain a disciplined capital structure while at the same time investing in our business to modernize our distribution facilities, as well as our tractor and trailer fleet, and to improve operational performance.

During the fiscal three months ended April 4, 2026, we:

• Used cash of $2.6 million to enhance our facilities, fleet, and technology hardware.

During the fiscal six months ended July 4, 2026, we:

• Added property & equipment consisting of purchased assets totaling $5.5 million plus assets obtained through finance leases totaling $4.6 million.

In addition, we recognized right-of use assets totaling $6.4 million related to operating leases.

These additions were used primarily to enhance our facilities, fleet, and technology hardware.

• Returned capital of $5.0 million to our shareholders by using cash to purchase 95,800 shares of our common stock at an average price of $52.19, excluding broker commissions and excise tax.

Between April 4, 2026 and April 21, 2026, we repurchased an additional 36,749 shares of our common stock at an average price of $54.43 per share excluding broker commissions and excise tax, for a total of $2.0 million.

Business and Digital Transformation

21 unchanged sentences

Our results of operations and financial performance are influenced by a variety of factors, including the following:

adverse housing market conditions;

adverse housing market conditions, including but not limited to housing starts, construction labor shortages, repair and remodel activity and commercial construction, foreclosure rates, interest rates, unemployment rates and job and wage growth rates, consumer debt levels, tightened availability or affordability of homeowner insurance coverage, and mortgage availability and pricing, as well as other consumer financing mechanisms, that ultimately affect demand for our products;

consolidation among competitors, suppliers, and customers;

9 unchanged sentences

acquisitions and the integration and completion of such acquisitions;

the success of management initiatives, including our business and digital transformation initiatives;

the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs;

artificial intelligence cost increases;

home center distribution disruption;

business disruptions;

exposure to product liability and other claims and legal proceedings related to our business and the products we distribute;

exposure to liability, including product liability and other claims and legal proceedings related to our business, employee injuries, workers compensation claims, and the products we distribute;

natural disasters, catastrophes, fire, wars or other unexpected events;

4 unchanged sentences

compliance costs associated with federal, state, and local environmental protection laws;

the effects of epidemics, global pandemics or other widespread public health crises and governmental rules and regulations;

changes in governmental rules and regulations or interpretations thereof;

fluctuations in our operating results;

7 unchanged sentences

changes in our product mix;

increases in fuel

and other energy prices, including as a result of disruptions in international shipping of oil and gas through the Strait of Hormuz and the ongoing conflicts in the Middle East and Ukraine, or availability of third part freight providers;

increases in fuel and other energy prices, including as a result of disruptions in international shipping of oil and gas through the Strait of Hormuz and the ongoing conflicts in the Middle East and Ukraine, or availability of third part freight providers;

geopolitical risks, such as acts of war or terrorism or political or civil unrest;

changes in insurance-related deductible/retention liabilities based on actual loss development experience;

4 unchanged sentences

interest rate risk, which could cause our debt service obligations to increase;

the effects of epidemic, global pandemics or otherwise widespread public health crises;

and changes in, or interpretation of, accounting principles.

These factors, and the related trends and uncertainties, have historically produced cyclicality in our results of operations, and we expect this cyclicality to continue in future periods.

For more information on the risk factors impacting our business, refer to Part II, Item 1A, Risk Factors , in this Form 10-Q and to Part I, Item 1A, Risk Factors, in our 2025 Form 10-K.

For more information on the risk factors impacting our business, refer to Part I, Item 1A, Risk Factors, in our 2025 Form 10-K, as supplemented by Part II, Item 1A, Risk Factors , in our Form 10-Q for the quarterly period ended April 4, 2026.

Results of Operations

Our results of operations for the fiscal three months ended April 4, 2026 (“fiscal first quarter of 2026” or “current year period” or “current year quarter”) and for the fiscal three months ended March 29, 2025 (“fiscal first quarter of 2025” or “prior year period” or “prior year quarter”) were as follows:

Fiscal Three Months Ended April 4, 2026 % of

Sales Fiscal Three Months Ended March 29, 2025 % of

Our results of operations for the fiscal three months ended July 4, 2026 (“Q2 2026” or “current quarter”) and for the fiscal three months ended June 28, 2025 (“Q2 2025” or “prior quarter”) were as follows:

Fiscal Three Months Ended July 4, 2026 % of

Sales Fiscal Three Months Ended June 28, 2025 % of

($ amounts in thousands)

8 unchanged sentences

Income before provision for income taxes 11,224 1.4% 6,578 0.8%

(Benefit) provision for income taxes (361) 0.0% 1,339 0.2%

Net (loss) income $ (1,458) (0.2)% $ 2,805 0.4%

Provision for income taxes 4,818 0.6% 2,268 0.3%

Net income $ 6,406 0.8% $ 4,310 0.6%

Our results of operations for the fiscal six months ended July 4, 2026 (“YTD 2026 period” or “current YTD period”) and for the fiscal six months ended June 28, 2025 (“YTD 2025 period” or “prior YTD period”) were as follows:

Fiscal Six Months Ended July 4, 2026 % of

Sales Fiscal Six Months Ended June 28, 2025 % of

($ amounts in thousands)

Net sales $ 1,545,226 $ 1,489,333

Gross profit 256,104 16.6% 230,818 15.5%

Selling, general, and administrative 203,575 13.2% 189,358 12.7%

Depreciation and amortization 23,447 1.5% 19,344 1.3%

Realization of deferred gains on real estate (1,967) (0.1)% (1,967) (0.1)%

Other operating, net 3,118 0.2% (1,676) (0.1)%

Operating income 27,931 1.8% 25,759 1.7%

Interest expense, net 18,526 1.2% 15,037 1.0%

Income before provision for income taxes 9,405 0.6% 10,722 0.7%

Provision for income taxes 4,457 0.3% 3,607 0.2%

Net income $ 4,948 0.3% $ 7,115 0.5%

The following table sets forth Net sales by product category and percentage of total Net sales by product category:

Fiscal Three Months Ended

April 4, 2026 March 29, 2025

Fiscal Three Months Ended Fiscal Six Months Ended

July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025

($ amounts in thousands)

3 unchanged sentences

The following table sets forth Gross profit, the percentage of total Gross profit earned by product category, and gross margin percentages by product category:

Fiscal Three Months Ended

April 4, 2026 March 29, 2025

Fiscal Three Months Ended Fiscal Six Months Ended

July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025

Gross profit:

7 unchanged sentences

Company gross margin % 17.2% 15.3% 16.6% 15.5%

Fiscal First Quarter of 2026 Compared to Fiscal First Quarter of 2025

For the fiscal first quarter of 2026, the Company’s Net sales were $731.1 million, an increase of $21.9 million, or 3.1%, compared to the fiscal first quarter of 2025.

• The $21.9 million overall increase in the Company’s Net sales in the current fiscal quarter was attributable to specialty products, partially offset by lower Net sales for structural products.

Combined, overall strong volume gains offset decreases in pricing.

• The current year period includes the Net sales for Disdero.

We acquired Disdero in fiscal fourth quarter of 2025.

• Approximately 70% and 68% of the Company’s Net sales in the fiscal first quarters of 2026 and 2025, respectively, were generated by specialty products.

The Company’s Gross profit for the fiscal first quarter of 2026 increased by $5.3 million, or 4.7%, to $116.4 million from $111.1 million in the fiscal first quarter of 2025.

• The increase in the Company’s Gross profit in the current fiscal quarter was attributable to both specialty products and structural products.

• The current year period includes the results of Disdero, which contributed to Gross profit.

• Approximately 80% of the Company’s Gross profit was generated by specialty products in the fiscal first quarter of 2026, compared to 81% in the fiscal first quarter of 2025.

• The Company’s gross margin percentage increased from 15.7% to 15.9% in the current fiscal quarter.

Disdero increased the Company’s gross margin percentage in the current period.

The import duty-related item described below increased the Company’s gross margin percentage by 40 basis points for the prior year period.

• Cost of products sold for the fiscal first quarter of 2025 included a benefit of $2.4 million related to retroactive adjustments associated with antidumping/countervailing (“AD/CV”) duties for certain imported specialty products.

See Note 3, Inventory, to the accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Specialty products - Net sales of specialty products, which include product types such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, increased by $32.4 million, or 6.8%, to $511.8 million in the fiscal first quarter of 2026.

• The increase in Net sales for specialty products in the current fiscal quarter was due to higher volumes for all product categories, partially offset by slightly lower pricing for most product categories due to a continuing competitive pricing environment.

• The current year period also includes the Net sales for Disdero.

• Specialty products’ Gross profit increased by $2.8 million, or 3.1%, to $92.6 million in the current fiscal quarter due to strong volume gains that exceeded the pricing decreases.

The current year period includes the results for Disdero, which contributed to Gross profit.

• Specialty products’ gross margin percentage decreased by 60 basis points to 18.1% compared to 18.7% in the fiscal first quarter of 2025.

Disdero increased the gross margin percentage in the current quarter.

The prior year period benefited from the $2.4 million duty-related refund described above, which increased the gross margin percentage for specialty products in the prior year period by 50 basis points.

Structural products - Net sales of structural products, which include product types such as lumber, panels (including plywood and oriented strand board), rebar, and remesh, decreased by $10.5 million, or 4.6%, to $219.3 million in the fiscal first quarter of 2026 compared to $229.8 million in the fiscal first quarter of 2025.

• This overall decrease in Net sales for structural products in the current fiscal quarter was due to lower pricing for panels and lumber, partially offset by volume gains for lumber.

• Compared to the first quarter of 2025, average commodity prices in U.S.

markets during the first quarter of 2026 for lumber were down approximately 4% and down approximately 14% for panels.

• Structural products’ Gross profit increased overall by $2.5 million, or 11.6%, to $23.8 million in the fiscal first quarter of 2026 from $21.4 million in the fiscal first quarter of 2025 due to margin expansion for both lumber and panels accompanied by higher Net sales for lumber.

• Structural products’ gross margin percentage for the fiscal first quarter of 2026 was 10.9% compared to 9.3% in the fiscal first quarter of 2025.

Our Selling, general, and administrative (“SG&A”) expenses increased by $2.1 million, or 2.2%, compared to the fiscal first quarter of 2025.

This overall increase was due primarily to Disdero.

The overall increase in the current quarter was partially offset by a benefit of $1.9 million for insurance proceeds received for business interruptions at our Erwin, Tennessee owned

facility that was damaged in the third quarter of 2024 by Hurricane Helene.

Depreciation and amortization expense increased by $2.4 million, or 25.3%, compared to the fiscal first quarter of 2025 due to a higher base of depreciable assets, including the property, equipment, and finite-lived intangible assets from the Disdero acquisition.

Other operating, net for the fiscal first quarter of 2026 was $1.9 million and composed mainly of severance expenses and professional services fees related to our business and digital transformation initiatives.

For the fiscal first quarter of 2025, we settled certain of the initial insurance claims related to property and equipment that was damaged or destroyed at our Erwin, Tennessee owned facility in 2024 due to Hurricane Helene.

We received insurance proceeds that exceeded the carrying values of the damaged or destroyed property and equipment by $2.4 million.

Interest expense, net, which includes gross interest expense less gross interest income, was $9.1 million and $6.6 million in the fiscal first quarter of 2026 and fiscal first quarter of 2025, respectively, resulting in an increase in net interest expense of $2.6 million in the current fiscal quarter.

• Gross interest expense was $12.2 million and $12.1 million in the fiscal first quarter of 2026 and fiscal first quarter of 2025, respectively.

• Gross interest income was $3.1 million and $5.5 million in the fiscal first quarter of 2026 and fiscal first quarter of 2025, respectively.

This decrease in the current fiscal quarter was due to lower average balances for interest-bearing deposits of cash/cash equivalents and due to lower interest rates paid on those deposits in the current fiscal quarter.

Additionally, interest income for the fiscal first quarter of 2025 included $0.5 million on refunds from U.S.

Customs for AD/CV import duties.

Fiscal Second Quarter of 2026 Compared to Fiscal Second Quarter of 2025

For Q2 2026, the Company’s Net sales were $814.1 million, an increase of $34.0 million, or 4.4%, compared to Q2 2025.

• The $34.0 million increase was attributable to both specialty products and structural products.

• Q2 2026 included the Net sales for Disdero.

We acquired Disdero in fourth quarter of fiscal 2025.

• Approximately 69% and 70% of the Company’s Net sales in Q2 2026 and Q2 2025, respectively, were generated by specialty products.

The Company’s Gross profit for Q2 2026 increased by $20.0 million, or 16.7%, to $139.7 million from $119.7 million in Q2 2025.

• The increase in the Company’s Gross profit was attributable to both specialty products and structural products.

• Q2 2026 includes the results of Disdero, which contributed to Gross profit for the Company and specialty products.

• Approximately 81% of the Company’s Gross profit was generated by specialty products in Q2 2026, compared to 84% in Q2 2025.

• The Company’s Cost of products sold for Q2 2026 included a benefit of $7.2 million for IEEPA tariff refunds.

See Note 9, Commitments and Contingencies, to the accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

• Gross profit and gross margin also benefited from our business and digital transformation efforts.

• The Company’s gross margin increased 190 basis points from 15.3% to 17.2% in Q2 2026, with both specialty products and structural products contributing to the increase.

Disdero also increased the Company’s gross margin in the current quarter.

The import duty-related item described above increased the Company’s gross margin by 90 basis points for Q2 2026.

Specialty products - Net sales of specialty products, which include product types such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, increased by $20.7 million, or 3.8%, to $564.1 million in Q2 2026 compared to Q2 2025.

• The overall increase in Net sales for specialty products in the current quarter was due primarily to higher pricing for most key product types and the positive impact of Disdero, partially offset by volume declines for most product types.

The increase in pricing was in response to price increases from key vendors and inflationary impacts on the cost of operating our business.

• Specialty products’ Gross profit increased by $12.3 million, or 12.3%, to $112.6 million in Q2 2026 compared to Q2 2025.

This increase in Gross profit for specialty products was primarily due to Disdero and the aforementioned $7.2 million of IEEPA tariff refunds.

• Specialty products’ gross margin increased by 150 basis points to 20.0% in Q2 2026 compared to 18.5% in Q2 2025.

This increase was primarily due to Disdero and the aforementioned import duty-related item which increased the gross margin for specialty products by 130 basis points in Q2 2026.

Structural products - Net sales of structural products, which include product types such as lumber, panels (including plywood and oriented strand board), rebar, and remesh, increased by $13.3 million, or 5.6%, to $249.9 million in Q2 2026 compared to $236.6 million in Q2 2025.

• The overall increase in Net sales for structural products in the current quarter was due to increases in pricing and volumes for lumber, partially offset by volume declines in panels.

• Compared to Q2 2025, average commodity prices in U.S.

markets for Q2 2026 were up approximately 9% for lumber and flat for panels.

• Structural products’ Gross profit increased overall by $7.7 million, or 39.8%, to $27.1 million in Q2 2026 from $19.4 million in Q2 2025 due to primarily to price and volume increases for lumber.

• Structural products’ gross margin for Q2 2026 was 10.9% compared to 8.2% in Q2 2025 due to margin expansion for both lumber and panels.

Our Selling, general, and administrative (“SG&A”) expenses increased by $12.1 million, or 12.7% in Q2 2026 compared to Q2 2025.

This overall increase in the current quarter was due primarily to Disdero, fuel expenses, third-party freight expenses, and employee-related expenses.

Depreciation and amortization expense increased by $1.7 million, or 17.2% in Q2 2026 compared to Q2 2025 due to a higher base of depreciable assets, including facility improvements, fleet enhancements, and technology upgrades, and finite-lived intangible assets from the Disdero acquisition.

Our depreciation expense includes depreciation for owned assets and assets under finance leases.

Other operating, net for Q2 2026 was a net expense of $1.2 million and was composed mainly of professional services fees

related to our business and digital transformation initiatives.

Interest expense, net, which includes gross interest expense less gross interest income, was $9.4 million and $8.5 million in Q2 2026 and Q2 2025, respectively, resulting in an increase in net interest expense of $0.9 million in the current quarter.

• Gross interest expense was $12.3 million and $12.6 million in Q2 2026 and Q2 2025, respectively.

• Gross interest income was $2.9 million and $4.2 million for Q2 2026 and Q2 2025, respectively.

This decrease in the current quarter was due primarily to lower average balances for interest-bearing deposits of cash/cash equivalents and due to lower interest rates paid on those deposits in the current quarter.

For fiscal 2026, we currently estimate that our annual effective income tax rate will be approximately 35%, excluding discrete items.

This estimate reflects nondeductible items and includes certain franchise taxes that are classified as income taxes under the provisions of ASC 740, Income Taxes .

We recognized an income tax benefit of $0.4 million for the fiscal three months ended April 4, 2026, resulting in an income tax benefit rate of 20% that reflects discrete items.

For the fiscal three months ended March 29, 2025, we recognized income tax expense of $1.3 million, resulting in an effective income tax rate of 32% for the period.

We recognized an income tax provision of $4.8 million for Q2 2026, resulting in an effective income tax rate of 42.9% that reflects discrete items.

For Q2 2025, we recognized income tax expense of $2.3 million, resulting in an effective income tax rate of 34.5% for the quarter.

The effective income tax rates for both quarterly fiscal periods were impacted by the permanent addback to taxable income of certain nondeductible expenses, including meals and entertainment and certain employee compensation, as well as excess tax benefits or expenses realized from settlements of share-based compensation grants.

The Company’s effective income tax rates will differ from the statutory rates by such items.

Our Net loss for the fiscal first quarter of 2026 was $1.5 million, or $0.18 loss per basic and diluted share, versus $2.8 million, or $0.33 per basic and diluted share, in the fiscal first quarter of 2025.

These decreases in the current period were due primarily to the factors previously discussed in this Item 2.

Our Net income for Q2 2026 was $6.4 million, or $0.81 earnings per diluted share, versus $4.3 million, or $0.54 per diluted share, for Q2 2025.

These increases in the current period were due primarily to the factors previously discussed in this comparison of Q2 2026 to Q2 2025.

First Six Months of Fiscal 2026 Compared to First Six Months of Fiscal 2025

For the YTD 2026 period, the Company’s Net sales were $1.55 billion, an increase of $55.9 million, or 3.8%, compared to Net sales of $1.49 billion in the YTD 2025 period.

• The increase in Net sales in the current YTD period was attributable to both specialty products and structural products.

• The YTD 2026 period included Net sales for Disdero.

We acquired Disdero in fourth quarter of fiscal 2025.

• Approximately 70% of the Company’s Net sales in the YTD 2026 period were generated by specialty products, compared to approximately 69% in the YTD 2025 period.

The Company’s Gross profit for the YTD 2026 period increased by $25.3 million, or 11.0%, to $256.1 million from $230.8 million in the YTD 2025 period.

• This increase in the Company’s Gross profit in the YTD 2026 period was attributable to both specialty products and structural products.

• The YTD 2026 period includes the results of Disdero, which contributed to Gross profit for the Company and specialty products.

• Approximately 80% and 82% of the Company’s Gross profit was generated by specialty products in the YTD 2026 period and the YTD 2025 period, respectively.

• The Company’s gross margin was 16.6% for the YTD 2026 period, an increase from the 15.5% for the YTD 2025 period.

Both specialty products and structural products contributed to this increase.

The import duty-related items noted below increased the Company’s gross margin by 50 basis points and 20 basis points for the YTD 2026 period and the YTD 2025 period, respectively.

• Gross profit and gross margin also benefited from our business and digital transformation efforts.

• We benefited in the YTD 2026 period and in the YTD 2025 period by $7.2 million and $2.4 million, respectively, for import duty-related items.

These items reduced the Company’s Cost of products sold and benefited the results of specialty products for the respective periods.

For the YTD 2026 period import duty-related item, see Note 9, Commitments and Contingencies , and for the YTD 2025 period import duty-related item, see Note 3, Inventory , to the accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Specialty products - Net sales of specialty products, which include product types such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, increased by $53.1 million, or 5.2%, to $1.08 billion in the YTD 2026 period.

• The increase in Net sales for specialty products in the YTD 2026 period was due to overall higher pricing and the inclusion of the Net Sales of Disdero.

The increase in pricing was in response to price increases from key vendors and the inflationary impacts on the cost of operating our business.

• Specialty products’ Gross profit increased by $15.1 million, or 7.9%, to $205.1 million in the YTD 2026 period compared to the YTD 2025 period due primarily to inclusion of Disdero’s results and the import duty-related items noted above.

• Specialty products’ gross margin increased 50 basis points to 19.1% for the YTD 2026 period compared to 18.6% in the YTD 2025 period, due primarily to the import duty-related item noted above and the inclusion of Disdero’s results, partially offset by variability in customer discounts and vendor rebates.

• The net impacts of the aforementioned import duty-related items increased specialty products gross margin by 70 basis points and 30 basis points for the YTD 2026 period and the YTD 2025 period, respectively.

Structural products - Net sales of structural products, which include product types such as lumber, plywood, oriented strand board, rebar, and remesh, increased by $2.8 million to $469.3 million in the YTD 2026 period.

• The overall increase in Net sales for structural products was due primarily to price and volume increases for lumber, partially offset by price and volume declines for panels.

• Compared to the YTD 2025 period, average commodity prices in U.S.

markets during the YTD 2026 period for lumber were up 3.0% and down 8.0% for panels.

• Gross profit for structural products increased by $10.2 million, or 25.0%, to $51.0 million from $40.8 million in the YTD 2025 period due primarily to higher pricing and volume for lumber, partially offset by pricing and volume declines for panels.

• Structural products’ gross margin for the YTD 2026 period was 10.9%, an increase from 8.7% in the YTD 2025 period due primarily due to margin expansion for lumber and panels.

Our SG&A expenses in the YTD 2026 period increased by $14.2 million, or 7.5%, compared to the YTD 2025 period.

This overall increase was due primarily to Disdero, third-party freight expenses, and employee-related expenses.

Depreciation and amortization expense increased by $4.1 million, or 21.2% in the YTD 2026 period compared to the YTD 2025 period due to a higher base of depreciable assets, including facility improvements, fleet enhancements, and technology upgrades, and finite-lived intangible assets from the Disdero acquisition.

Our depreciation expense includes depreciation for owned assets and assets under finance leases.

Other operating, net declined by $4.8 million compared to the YTD 2025 period.

For the YTD 2026 period, the net expense is composed mainly of professional services fees related to our business and digital transformation initiatives.

For the YTD 2025 period, the net credit was primarily due to initial settlements of certain insurance claims related to property and equipment that were damaged or destroyed at our Erwin, Tennessee owned facility in late third quarter of fiscal 2024 due to Hurricane Helene.

We received insurance proceeds that exceeded the carrying values of the damaged or destroyed property and equipment by $2.4 million.

Interest expense, net, which includes gross interest expense less interest income, increased by $3.5 million in the YTD 2026 period compared to the YTD 2025 period.

• Gross interest expense was $24.5 million and $24.7 million in the YTD 2026 period and the YTD 2025 period, respectively.

• Gross interest income was $6.0 million and $9.7 million in the YTD 2026 period and the YTD 2025 period, respectively.

This decrease in the YTD 2026 period was due to lower average balances for interest-bearing deposits of cash/cash equivalents and due to lower interest rates paid on those deposits in the current YTD period.

For fiscal 2026, we currently estimate our annual effective income tax rate to be approximately 35%, excluding discrete items.

Our effective income tax rates were 47.4% and 33.6% for the YTD 2026 period and the YTD 2025 period, respectively.

Our effective income tax rates for both year-to-date periods were impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and certain employee compensation, as well as excess tax benefits or expenses realized from settlements of share-based compensation grants.

Our net income for the YTD 2026 period was $4.9 million, or $0.62 per diluted share, versus $7.1 million, or $0.87 per diluted share, in the YTD 2025 period.

Our net income for the YTD 2026 period decreased due primarily to the factors that were previously discussed in this comparison of the YTD 2026 period to the YTD 2025 period.

Liquidity and Capital Resources

1 unchanged sentence

We expect that these sources will be sufficient to fund our ongoing cash requirements for at least the next 12 months and into the foreseeable future.

As of April 4, 2026, we had $319 million of cash and cash equivalents plus $340.1 million of availability on our revolving credit facility.

As of July 4, 2026, we had $318 million of cash and cash equivalents plus $336.8 million of availability on our revolving credit facility.

Senior Secured Notes

2 unchanged sentences

Our 2029 Notes are scheduled to mature on November 15, 2029, and no principal is due until that time as long as we remain in compliance with the related covenants.

As of April 4, 2026, we were in compliance with these covenants.

As of July 4, 2026, we were in compliance with these covenants.

Interest payments of $9.0 million for the 2029 Notes are due twice in each calendar year, in May and in November.

3 unchanged sentences

Subject to certain conditions and consents, we have the option to increase the facility by an aggregate additional principal amount of up to $300 million which could in the future allow total borrowings of up to $650 million.

As of April 4, 2026 and January 3, 2026, we had no outstanding borrowings under our revolving credit facility.

Available borrowing capacity, reduced for undrawn letters of credit, under the revolving credit facility was $340.1 million and $340.1 million as of April 4, 2026 and January 3, 2026, respectively.

Excess availability, which includes availability under the revolving credit facility plus cash and cash equivalents in qualified deposit accounts, was $659.2 million as of April 4, 2026.

Had there been outstanding borrowings under our revolving credit facility as of April 4, 2026, the annualized interest rate, as described in Note 6, Debt and Finance Lease Obligations , to the accompanying unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report, would have been 4.65%.

As of July 4, 2026 and January 3, 2026, we had no outstanding borrowings under our revolving credit facility.

Available borrowing capacity, reduced for undrawn letters of credit, under the revolving credit facility was $336.8 million and $340.1 million as of July 4, 2026 and January 3, 2026, respectively.

Excess availability, which includes availability under the revolving credit facility plus cash and cash equivalents in qualified deposit accounts, was $655.0 million as of July 4, 2026.

Had there been outstanding borrowings under our revolving credit facility as of July 4, 2026, the annualized interest rate, as described in Note 6, Debt and Finance Lease Obligations , to the accompanying unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report, would have been 4.63%.

Finance Lease Obligations

Our finance lease obligations consist of leases for real estate, equipment, and vehicles totaling $316.7 million and $321.3 million as of April 4, 2026 and January 3, 2026, respectively.

Of the $316.7 million for finance lease obligations as of April 4, 2026, $240.0 million related to real estate and $76.7 million related to equipment.

Our finance lease obligations consist of leases for real estate, equipment, and vehicles totaling $316.0 million and $321.3 million as of July 4, 2026 and January 3, 2026, respectively.

Of the $316.0 million for finance lease obligations as of July 4, 2026, $239.4 million related to real estate and $76.6 million related to equipment.

Of the $321.3 million for finance lease obligations as of January 3, 2026, $240.6 million related to real estate and $80.6 million related to equipment.

During the fiscal first quarters of 2026 and 2025, we used cash of $4.6 million and $4.3 million, respectively, to repay principal portions of finance lease obligations, and also incurred interest expense of $6.9 million and $6.9 million, respectively, for our finance lease obligations.

During the YTD 2026 period and the YTD 2025 period, we used cash of $9.9 million and $8.1 million, respectively, to repay principal portions of finance lease obligations, and also incurred interest expense of $13.8 million and $13.9 million, respectively, for our finance lease obligations.

For additional information about our lease obligations and expected impacts on our liquidity, see Note 7, Leases , to the accompanying unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report.

1 unchanged sentence

Operating Activities

Net cash used in operating activities for the first three months of fiscal 2026 was $57.2 million compared to net cash used of $33.9 million in the first three months of fiscal 2025.

The $23.3 million decrease in cash generated from operating activities during the first three months of fiscal 2026 was primarily a result of $24.1 million of net changes in operating assets and operating liabilities.

Net cash used in operating activities for the YTD 2026 period was $46.1 million compared to net cash used of $60.7 million in the YTD 2025 period.

The $14.6 million increase in cash from operating activities during the YTD 2026 period was primarily the result of higher net income and favorable net changes in operating assets and operating liabilities.

Investing Activities

Net cash used in investing activities for the first three months of fiscal 2026 was $1.7 million compared to net cash used of $3.4 million in the first three months of fiscal 2025.

During the first three months of fiscal 2026 and first three months of fiscal 2025,

we used cash of $2.6 million and $5.9 million, respectively, to acquire property and equipment.

In the current quarter, we received a $0.9 million reduction in the consideration paid for our Disdero acquisition.

In the prior year period, we received initial insurance proceeds of $2.4 million related to property and equipment that was damaged or destroyed due to Hurricane Helene at our Erwin, Tennessee owned facility in September 2024.

Net cash used in investing activities for the YTD 2026 period was $4.0 million compared to net cash used of $12.9 million in the YTD 2025 period.

During the YTD 2026 period and YTD 2025 period, we paid cash of $5.0 million and $15.5 million, respectively, to purchase property and equipment.

In the YTD 2026 period, we received $0.9 million related to a reduction in

the consideration paid for our Disdero acquisition.

In the YTD 2025 period, we received initial insurance proceeds of $2.4 million related to property and equipment that was damaged or destroyed due to Hurricane Helene at our Erwin, Tennessee owned facility in September 2024.

Financing Activities

Net cash used in financing activities totaled $7.8 million for the first three months of fiscal 2026 compared to net cash used of $19.3 million for the first three months of fiscal 2025.

This change was primarily driven by the decrease for repurchases of our common stock in the current period.

During the first three months of fiscal 2026, we used cash of $2.8 million to repurchase shares of our common stock, compared to $15.0 million for the first three months of fiscal 2025.

Payments to reduce finance lease obligations also used cash of $4.6 million and $4.3 million for the fiscal first quarters of 2026 and 2025, respectively.

Net cash used in financing activities totaled $17.6 million for the YTD 2026 period compared to net cash used of $45.3 million for the YTD 2025 period.

This change was primarily driven by the decrease in repurchases of our common stock in the current YTD period.

During the YTD 2026 period, we used cash of $5.3 million to repurchase shares of our common stock, compared to $35.4 million for the YTD 2025 period.

Payments to reduce finance lease obligations also used cash of $9.9 million and $8.1 million for the YTD 2026 period and the YTD 2025 period, respectively.

Common Stock Repurchases

During the first three months of fiscal 2026, we repurchased 59,051 shares of our common stock at an average price of $50.83 per share for a total of $3.0 million, under our 2023 share repurchase authorization.

During the first three months of fiscal 2025, we repurchased 186,048 shares of our common stock at an average price of $80.65 for a total of $15.0 million under this same authorization.

As of April 4, 2026, there remained $5.7 million of repurchase capacity under the 2023 authorization.

Between April 4, 2026 and April 21, 2026, we repurchased an additional 36,749 shares of our common stock at an average price of $54.46 per share, for a total of $2.0 million.

During the YTD 2026 period, we repurchased 95,800 shares of our common stock at an average price of $52.22 per share for a total of $5.0 million, under our 2023 share repurchase authorization.

During the YTD 2025 period, we repurchased 469,129 shares of our common stock at an average price of $74.64 for a total of $35.0 million under this same authorization.

As of July 4, 2026, there remained $3.7 million of repurchase capacity under the 2023 authorization.

These dollar amounts include broker commissions paid but exclude any excise tax that was paid or may be due on the share repurchases under The Inflation Reduction Act of 2022.

8 unchanged sentences

This metric differs from traditional working capital in that it excludes certain current assets and current liabilities that are reported in our consolidated balance sheets.

Net working capital of $473.1 million as of April 4, 2026, compared to $407.8 million as of January 3, 2026, increased on a net basis by approximately $65.4 million, as shown below:

April 4, 2026 January 3, 2026 March 29, 2025

Net working capital of $503.0 million as of July 4, 2026, compared to $407.8 million as of January 3, 2026, increased on a net basis by approximately $95.2 million, as shown below:

July 4, 2026 January 3, 2026 June 28, 2025

(In thousands)

Receivables, less allowance for doubtful accounts $ 296,732 $ 218,161 $ 275,574

Receivables, less allowances $ 315,939 $ 218,161 $ 278,737

Inventories, net 375,258 325,998 391,484

2 unchanged sentences

Net working capital $ 503,010 $ 407,771 $ 492,231

Investments in Property and Equipment

Our investments in capital assets consist of purchases of owned assets and the inception of financing lease arrangements for long-lived assets.

The gross value of these assets is included in property and equipment, at cost on our consolidated balance sheets.

For the first three months of fiscal 2026, we invested $2.6 million in long-lived assets primarily related to investments in our facility improvements, technology, and fleet.

For the first three months of fiscal 2025, we invested $6.4 million in long-lived assets primarily related to investments in our distribution facilities and upgrading our fleet.

We also added $28.1 million in new finance leases during the 2025 fiscal quarter for new tractors and forklifts to enhance our logistics network.

Additions to Property and Equipment

Property and equipment that are purchased or leased under finance lease arrangements are included in property and equipment, at cost on our consolidated balance sheets.

Property and equipment under operating leases are included in Operating lease right-of-use assets on our consolidated balance sheets.

Additions to property and equipment during the YTD 2026 period consisted of purchased assets of $5.5 million plus $4.6 million obtained through finance leases.

In addition, we recognized right-of-use assets of $6.4 million related to operating leases.

These purchased and leased additions were related to improvements to our facilities, technology, fleet and logistics network.

Additions to property and equipment during the YTD 2025 period consisted of purchased assets of $16.4 million plus $32.9 million obtained through finance leases.

In addition, we recognized right-of-use assets of $4.0 million related to operating leases.

These purchased and leased additions were related to facility improvements, ongoing digital transformation, and new tractors and forklifts to enhance our logistics network.

Critical Accounting Policies

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis